Friday, September 19, 2003

Queen Kaahumanu
deal finally closes

L.A.-based Somera purchases
the Maui mall for an undisclosed
price; General Growth will manage it

The Queen Kaahumanu Center on Maui has been sold to a Los Angeles-based real estate investment company, Somera Capital Management LLC, for an undisclosed price.

Sources said that General Growth Properties Inc., owner and manager of the Ala Moana Center and Victoria Ward Ltd., will take over the management of the Kahului center, which has 570,000 square feet of leasable space.

Maui Land & Pineapple Co., a 50-50 partner with the state Employees' Retirement System in the ownership of the center, announced in May it had found a buyer but it took until now to conclude the deal and get the transaction into escrow.

The center has lost money every year since ERS invested in it in April 1995 and lost $2.5 million last year on revenues of $14.8 million.

MLP, which has been suffering big losses in its pineapple business, has been undergoing a restructuring. The company recently sold Napili Plaza, a 45,200-square-foot neighborhood shopping center in West Maui for $7.1 million to a subsidiary of Alexander & Baldwin Inc.

ERS has close to 10 percent of its money invested in real estate and is not at all averse to real estate investments in Hawaii, said Rick Humphreys, chairman of the retirement fund's investment committee. "But the investment must return both a cash return and an appreciation over time" and Queen Kaahumanu was not doing that, he said.

Humphreys said that while he had not heard that General Growth Properties would be managing the center, it would make sense because a management company with many locations can make better tenant connections than a small center working on its own.


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